In the 1918 case Denver & Rio Grande Railroad Company v. City and County of Denver et al., the U.S. Supreme Court dealt with a dispute over taxation between a railroad company and local government entities in Colorado. The Denver & Rio Grande Railroad Company argued that it was being unfairly taxed by both the city and county of Denver, as well as other counties where its tracks were located, for property that was not physically within their jurisdictions or which had already been accounted for elsewhere. The court ruled in favor of the railroad company, stating that double taxation on intangible assets such as franchise rights violated due process under law according to Fourteenth Amendment protections against deprivation of property without due process.

In the dissenting opinion for Denver & Rio Grande Railroad Company v. City and County of Denver et al., Justice McReynolds expressed his disagreement with the majority's decision to uphold a tax assessment on the railroad company by local authorities. He argued that this was an unfair burden on interstate commerce, which should be regulated exclusively by Congress under the Commerce Clause of the Constitution. The justice contended that allowing local governments to impose such taxes would lead to inconsistent and potentially discriminatory taxation across different jurisdictions, thereby disrupting free trade among states. Furthermore, he believed it was inappropriate for courts to defer so heavily to administrative agencies in determining what constitutes a fair tax assessment, as this could undermine judicial review and checks on government power.